A quirky zoning code change has allowed mega-mansions to flourish in one three-block swath.

When KoenigRubloff agent Janet Owen listed a 20,000-square-foot mansion at 1955 North Burling Street in Lincoln Park in June for $18.8 million—making it the most expensive ­single-family house ever listed in Chicago—the astronomically high figure caught the eye of nearly every real estate watcher in town. That price tag shouldn’t have been too much of a surprise, though, given the house’s location in a small patch of Lincoln Park that’s home to the ritziest properties in the city: the 1800 and 1900 blocks of North Burling, Orchard, and Howe Streets, just east of Halsted Street. “Like the Big Ten, Lincoln Park has the Big Three,” says Coldwell Banker’s Jennifer Ames.

In 2013, the priciest house sold in the city was 1866 North Howe Street, at $9 million. And at presstime, 14 homes in those three blocks either had pending sales for at least $3 million or were listed at upwards of $3 million—more than at any time in the past five years, according to several sources.

So why the concentration of so much wealth there? It’s all because of a decades-old change in zoning laws.

In this section of Lincoln Park, regulations allow houses to reach 47 feet high and have a floor-area ratio (the amount of floor surface allowed in relation to the size of the lot) of 1.7. By contrast, west of Halsted, houses max out at 38 feet and a 1.2 floor-area ratio. In the 1950s, the City Council designated these eastern blocks as R5, later revised to RM4.5—a residential code that allows multiunit buildings and thus bigger structures.

What’s more, the area is just outside of the historic districts in the Gold Coast and Old Town Triangle—meaning it’s much easier to demolish existing buildings and erect megamansions. And there are fewer alleys than in other parts of Lincoln Park, so most owners can build huge yards or expand houses very deeply.

Those reasons led insurance tycoon Richard Parrillo to build a 15,500-square-foot limestone manse at 1932 North Burling Street in the late 2000s. He spent four years and $40 million razing seven city lots and constructing the 15-room residence, complete with imported French gravel. Parrillo is not the only one-percenter in the area—for example, Commerce Secretary Penny Pritzker and Sara Crown Star, daughter of financier Lester Crown, live there, too.

The push for luxury housing in this neighborhood shows no signs of stopping. A planned structure at 1959 North Orchard Street is set to rival Parrillo’s. According to one listing agent, the house will be built on five city lots and hit roughly 20,000 square feet when it’s completed next year.

1. 1932 North Burling Street

Built by insurance honcho Richard Parrillo for a reported $40 million in 2008